Measuring resource utilization in the labor market

The US unemployment rate increased substantially following the Great Recession, reaching close to 10% in the fourth quarter of 2009. As of December 2014, the unemployment rate has declined by more than 4 percentage points, faster than many policy- makers forecasted at the time. As unemployment rates...

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Bibliographic Details
Published in:Economic quarterly - Federal Reserve Bank of Richmond 2014-01, Vol.100 (1), p.1-21
Main Authors: Hornstein, Andreas, Kudlyak, Marianna, Lange, Fabian
Format: Article
Language:English
Subjects:
Company business management
Economic aspects
Economic conditions
Employment
Forecasts and trends
Great Recession
Influence
Labor
Labor force
Labor market
Labor supply
Labour force
Management
Market trend/market analysis
Markets
Measurement
Measurement techniques
Population
Recessions
Resource management
Statistics
Studies
Unemployment
United States
Workforce
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Summary:The US unemployment rate increased substantially following the Great Recession, reaching close to 10% in the fourth quarter of 2009. As of December 2014, the unemployment rate has declined by more than 4 percentage points, faster than many policy- makers forecasted at the time. As unemployment rates declined, labor force participation rates also declined by about 2 percentage points. This has raised doubts on the ability of the unemployment rate alone to accurately represent the state of resource utilization in the labor market. Broader measures than the standard unemployment rate may therefore be needed to indicate resource utilization in the labor market. In this article, the authors briefly review the extended unemployment measures of the Bureau of Labor Statistics, which capture individuals not usually counted as unemployed. Importantly, these measures of unemployment assign the same weight to all nonemployed individuals included in the measures despite there being substantial differences in labor force attachment among the nonemployed.
ISSN:1069-7225
2163-4556